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Friday, December 19, 2008

Ending the Current Recession: New Business Lines (Part 1 of 5)

Many 1st World thinkers believe that the current recession will degenerate into a depression which is not as severe as the 1930s US version but nevertheless will create much misery among billions of people worldwide.

What should humanity do? Most 1st World recommendations focus on aiding selected 1st World companies and industries, usually the biggest ones. The largest companies employ so many and operate worldwide. Abandoning them to their fate is simply not an option. The talk so far is $700 billion to several trillion dollars in state loans to selected USA companies alone. More trillions of dollars in spending to stimulate businesses are planned by political leaders in Europe and Asia.

But what’s really the point of aiding companies when the markets are the problem? Observers note that 1st World publics will not be in buying mode for a long time. First World peoples fear a long recession so are holding on to their purses. Millions of employees all over the world also lost their jobs so world purchasing power and productivity are at bottom levels. Much of the world’s mega ships are in dock awaiting shipments that do not come.

So what should our grassroots cyber army do? The most logical solution is to create new markets in the 3rd World. Here’s the vision:

To end the current recession, every 1st World government passes an ‘Expand World Markets’ law. The EWM law buys billion-dollar 20-year bonds issued by 3rd World governments. An EWM agency in each 1st world government manages the issues.
The EWM bond purchases are conditional to 3rd World government borrowers’ passage of a Loans for Mass Entrepreneurship law. The LME law lends several hundred billion in local currency each year to employees that form thousand-member investment unions, each intent on forming a group of joint venture companies with 1st World corporations.

Why lend to investment unions? The scheme is the most effective way to create massive markets. When the masses become entrepreneurs, wealth from new employment (salaries), from dividends and rises in value of stock shares’ held by ordinary people create world-scale purchasing power for all manner of producer and consumer goods. If the loans financed elite companies as before, wealth bottles up among the elite few and markets get severely limited to luxury items. Wealth gaps grow even wider, political tensions worsen, and the recession lasts for years.

To facilitate matters, the EWM agencies may lend to 1st World companies partnering with thousand-member employee unions in the 3rd World. Since the 3rd World severely lacks such necessities as roads and bridges, telecoms, inter-island vessels, cheap fuel (such as ethanol), mini-hydropower plants, commercial farms, processing factories, metal works, foundries and such, the new joint ventures will tend to build such basics.

Machinery, construction materials and equipment for such basic business lines are exactly what 1st World companies produce in quantity. The 3rd World comprises five-sixths of mankind. The markets for machinery and equipment will thereby become so huge that 1st World industries can’t help but rise relatively quickly out of the recession.

How long will the resultant expansion or ‘coasting in prosperity’ take? Probably forever. The EWM and LME laws are laws, which means they will keep channeling trillions of dollars in capital and loans to 3rd World masses and their joint venture companies unless repealed. The said laws will also ‘force’ a culture of mass entrepreneurship among billions of people, which means perpetual birth of job-creating corporations.

Governments may further ‘force’ 3rd World elementary level new hires in their billions to study innovation-oriented courses to College and even PhD level. Pressure may come within new hires’ employment contracts. The scheme should build a permanent innovation culture among five billion former poor. Innovation-oriented courses have to teach student teams to invent at least five products and technologies, thence sell (license) them to scores of joint venture companies. This is another way of raising the poor to the middle and upper classes on permanent basis.

Inventions and commercialization of inventions perpetuated by billions of new skills will present unceasing arrays of new business lines to all companies whenever they experience sales declines in certain product lines due to stiff competition. Result: the natural up-down cycles of every company’s scores of product lines will create a combined ‘prosperity’ line that just won’t go down. Humanity will finally see the end of grave recessions and depressions and the great miseries that they cause.

About Me

Author is a Bus.Adm. Marketing graduate from University of the East, Manila Philippines. He has worked as bank credit investigator, as Research Section Chief for a World Bank-funded co-ops development program of a gov't agency, as fishing boat partner, as dept. secretary of Saudi Shell, as farmer and passenger jeep operator, and as director's secretary, Saudi Min.of Interior. Author has researched rich-poor gaps and elite wealth-making ways for over 40 years as an obsession. Some results are posted in this blog. The findings recommend an imperative towards a happier human history: your leadership in a world-scale anti-poverty war!